Manufacturing in America continues to soar and there are strong indications that this trend will continue. The latest Cutting Tool Market Report, jointly compiled by the U.S. Cutting Tool Institute and the Association For Manufacturing Technology shows that U.S. manufacturers purchased $223.46 million in cutting tools in October 2018. This number represents a 6.1% increase over September 2018 and a 12.9% increase vs October 2017.
Cutting tools are a primary consumable product for manufacturers, and orders for cutting tools such as drill bits, milling cutters, taps, and turning inserts have long been a bellwether of where manufacturing is headed in the immediate future. Cutting tool demand is widely considered to be an accurate measure of production levels.
“October results continue the trend we have seen all year. There are some monthly fluctuations but the year over year and year to date remain over 12% ahead of last year. The market buzz continues to be positive and it appears 2018 will be the best year in over six years,” said Phil Kurtz, president of U.S. Cutting Tool Institute.
Experts attribute these numbers to an increase in oil prices, consumer demand for durable goods and fiscal stimulus, however, Scott Hazelton, managing director of economics & country risk at IHS Markit cautioned, “Business confidence ebbed towards the end of 2018, with uncertainty over trade and the duration of strong economic growth increasing. Combined with a declining tailwind from tax reform, and increasing wages in a tight labor market, we expect some slowing of manufacturing growth next year, with cutting tool demand growth likely downshifting from over 13% in 2018 to just under 7% in 2019. This still suggests another strong year in 2019, but growth will moderate further in 2020 as the broad economy slows.”